Investorideas.com newswire, defense and security sector

Thursday, January 22, 2015

2015 Defense Stocks Interview with Scott Sacknoff, President, SPADE Defense Index (NYSE: ^DXS)

2015 Defense Stocks Interview with Scott Sacknoff, President, SPADE Defense Index (NYSE: ^DXS)

Point Roberts WA, NEW YORK, NY – January 22, 2015 – ( www.investorideas.com newswire and Homelanddefensestocks.com) - Investorideas.com, a global news source covering leading sectors including defense and security, issues a 2015 interview with Scott Sacknoff, President of Spade Defense Index (NYSE: ^DXS).

Scott Sacknoff manages the SPADE Defense Index (NYSE: ^DXS) which serves as the underlying index for PowerShares Aerospace & Defense ETF (NYSE: PPA).  http://www.spadeindex.com/

Interview Q&A
                                                                                                      
HDS: Hi, this is Dawn Van Zant with HomelandDefenseStocks.com.  We are once again joined by Scott Sacknoff, President of the SPADE Defense Index, a benchmark for investors interested in defense and homeland security.  He will look back with us on how investors performed in 2014, as well as give us a look ahead to what we can expect in 2015.  Mr. Sacknoff, thank you for joining us.

SMS: My pleasure Dawn.

HDS: Let’s start with 2014. How did the sector perform?

SMS: Well instead of an eagle, perhaps the symbol for aerospace and defense stocks should be the Energizer Bunny…as it keeps going and going. Even the most optimistic of analysts didn’t foresee defense stocks gaining more than 48% in 2013, and after a 4th quarter surge in 2014, the sector’s benchmark ended 2014 with new historic highs, gaining 11.8% for the year, roughly 40 basis points ahead of the S&P500.

HDS:  Can you tell us what drove this performance?

SMS:  There were obviously a number of global incidents around the world, most notably the conflict between Russia and the Ukraine and the rise of ISIS in the Middle East and the threat that they represent.  One could easily look around the world - whether it was Boko Harem in Nigeria, civil wars in Syria and Libya, or potential threats in Iran, North Korea, the Arctic, and the seas around China - and see conflict.  Overall, large caps dominated again, a surprise after leading the sector for the past several years but mirroring a trend where the broader market sought safety in large cap companies.  The returns from four of the five defense primes all significantly outperformed the market [General Dynamics +44%, Lockheed +30%, Northrop Grumman +29%, Raytheon +19%] with only Boeing being the laggard [It was down 5% after an 84% gain in 2013].

HDS:  Were there any other noticeable trends?

SMS:  The two big trends cited over the past several years continue, namely (1) gains in commercial aerospace, which is in the middle of a multi-year expansion, and (2) rising international defense sales that would offset cuts to the U.S. budget. 

HDS: Skipping ahead to 2015, can you tell us which companies or activities might perform well?

SMS: Aerospace, defense, and security stocks should continue to be a stable place for investors as the sector tends to have a lower correlation with the economic, currency and political concerns economists expect in 2015.  Companies involved with defense-related IT and homeland security activities such as cyber and big data should gain.  And after several years of large caps dominating returns, the possibility that the cycle will shift to the small and mid-caps, as it did in the early 2000s, is gaining traction.

HDS: Lastly, in 2015, what are some key events that investors should pay attention to?

SMS: The Paris Air Show in June should present a number of interesting opportunities.  The show is generally a showcase of international deals related to military and commercial aircraft, rotorcraft, UAVs and space systems, and announcements totaling $50-$100+ billion is typical. This will likely generate some headlines for several weeks in June.  Additionally, there are some in the new Republican controlled Congress that are seeking to end sequestration and stabilize the defense budget through the end of the decade. The possibility is obviously a positive.  Lastly, general economic conditions need to be monitored.  Although the sector is less correlated with the global economy than other sectors, risk remains and short-term moves are not unexpected.  Long-term, the sector has proven to offer investors with returns that exceed the S&P500. 

HDS: With a long track record of results, are investors returning to the sector?

SMS: Many defense stocks are at or near historic highs. The Powershares Aerospace & Defense ETF (NYSE: PPA) hit its historic high on 26 December 2014.  And over the past 18-24 months, the assets managed by ETFs have tripled from its lows when some thought major defense cuts were inevitable. Still in terms of shares outstanding, the funds are well below their peak, implying investors have returned but there is still significant room for growth.  As it becomes more difficult for investors to pick and choose the winners in the sector and rotate among them, the ETFs tend to become more attractive and in turn attract more investors.

HDS: Scott, thank you for taking some time with us today. 


InvestorIdeas.com newswire is a global recognized news source. We publish original content, third party investment commentary, contributor articles, company news and press releases in leading sectors.
Sectors we cover in include mining, energy, renewable energy, water stocks, food and beverage (including organic and LOHAS, wine), defense and security, biotech, technology and mobile. We have also recently expanded our global coverage to include Latin American stocks, sports and entertainment.

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Spade Defense Index Disclaimer:  The information presented here is for information purposes only and should not represent a solicitation or an offer to purchase an investment product.

Disclaimer/ Disclosure: The Investorideas.com newswire is a third party publisher of news and research as well as creates original content as a news source. Original content created by investorideas is protected by copyright laws other than syndication rights. Investorideas is a news source on Google news  and syndication partners. Our site does not make recommendations for purchases or sale of stocks or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated by featured companies, news submissions, content marketing and online advertising. Contact each company directly for press release questions. Disclosure is posted on each release if required but otherwise the news was not compensated for and is published for the sole interest of our readers. More disclaimer info: http://www.investorideas.com/About/Disclaimer.asp
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Tuesday, January 20, 2015

Defense Stocks Conversation with Scott Sacknoff, Manager, SPADE Defense Index (NYSE: ^DXS)



Defense Stocks Conversation with Scott Sacknoff, Manager, SPADE Defense Index (NYSE: ^DXS)

The question being asked is, “How should investors look at the terrorism events in Paris?”


Point Roberts WA, NEW YORK, NY – January 20, 2015 – ( www.investorideas.com newswire and Homelanddefensestocks.com) - Investorideas.com, a global news source covering leading sectors including defense and security, issues recent commentary from  Scott Sacknoff, President of Spade Defense Index (NYSE: ^DXS) following the recent Paris attacks and increased global terrorism events.

Scott Sacknoff manages the SPADE Defense Index (NYSE: DXS) which serves as the underlying index for PowerShares Aerospace & Defense ETF (NYSE: PPA).  http://www.spadeindex.com/

The question being asked is, “How should investors look at the terrorism events in Paris?”

Scott Sacknoff, President of Spade Defense Index:

Terrorism is once again front and center in the news.  The physical attacks in Paris in January 2015 were among a number that have taken place over the past few weeks, including a raid by Belgian authorities killing two suspected terrorists, an Ohio man who plotted to attack the U.S. Congress, satellite images showing that Boko Haram wiped out a number of villages in Nigeria, as well as their kidnapping of around 80 people in Cameroon; and of course, this doesn’t even mention any of the cyber-focused attacks, which are not addressed here. 

The human impact to attacks such as these are of course clear but the financial/investing impact is less so.  Identifying firms that benefit immediately after terrorist actions is not as easy as it sounds.  Even after 9/11 almost all stocks in the United States declined immediately, including defense and security stocks.  These rose once the situation stabilized a bit and plans to increase funding to combat the terrorists were announced.  Still one can draw conclusions. A bombing on a plane will lead to increased security measures at airports; so firms that manufacture scanners, such as American Science and Engineering (ASEI) or OSI Systems (OSIS), should benefit and see increased orders over time. Likewise if a missile were to down a plane, there would be calls for installing anti-aircraft devices on commercial planes and so one would assume a rise in stocks of companies that manufacture those devices.  But the correlation is not absolute. With a steady frequency of events, there is a history now that shows additional funding does not necessarily flow immediately following a terrorist event; one must consider the likelihood and availability of whether funds for the new contracts will come. 

As another example, following several recent police interactions that led to deaths in Missouri, New York, and elsewhere, there was a call for the police to utilize video collection systems to record events in real-time.  After statements from elected officials stating their willingness to allocate funds, one can see that there was an obvious rise in the stock price of Taser (TASR), which offers said product. Whether it can maintain these levels depends on whether municipalities deliver on their plans to buy their product.   

Where security and defense stocks do benefit, consistently, is that the increased publicity of terrorist activities leads to an underlying sense that we are never totally safe. It is in this environment that spending on defense and security are considered an important part of government funding and the sector can operate within a stable budget environment. And a stable environment is one that benefits most firms. 


Q: Investorideas.com:
Regarding Paris, are there technologies that investors should look toward that might be employed to prevent situations like what occurred?   

A: Scott Sacknoff, President of Spade Defense Index
It appears from news reports, including an excellent summary in the New York Times, that the lead instigators in Paris were known to authorities, had been arrested, and were on terrorist watch lists.  Over time, French authorities appeared to decide that after years of inaction, at least that they were aware of, it was no longer necessary to track these persons. No matter the technology employed, even those some believe cross the boundaries of personal freedoms, it is still the human element that sometimes makes the call.

Still technology is critical to helping identify potential problems, whether dealing with “lone wolf” actions of an individual, or small groups acting on their own or those associated with a terror cell or network.  And even when it fails to identify the threat in advance, as it did in Paris or the Boston Marathon, technology solutions were critical to capturing the suspects and stopping them before they were able to pursue future attacks.

Key technologies in these efforts are analytics for mining big data including automated video analysis, and surveillance and reconnaissance systems and networks. All of these should see growth in the coming years.  In the world of security, using statistical correlations and identifying patterns can be like looking for a needle in a haystack. Still money is flowing in this direction.  The inherent value is known to commercial entities (to identify consumer trends and process efficiencies) as well as to the counterterrorism sector.  Firms operating at the intersection of security, cyber, and big data include: Lockheed Martin, Booz Allen, CACI, and FireEye, to name but a few, as well as the more commercial IBM, HP, Amazon, Cloudera, and Splunk’s of the world.


Q: Investorideas.com:
Can you quantify investor reaction to these recent events?

A: Scott Sacknoff, President of Spade Defense Index
Significant inflows into the Powershares Aerospace & Defense ETF (NYSE: PPA), the fund that tracks the benchmark SPADE Defense Index, have been detected over the past year. However, considering the fund was up more than 48% in 2013 and nearly 12% in 2014, and the Paris attacks coincided with a broad global market decline, there is really no way to correlate gains in the fund with investors’ actions. 






InvestorIdeas.com newswire is a global recognized news source. We publish original content, third party investment commentary, contributor articles, company news and press releases in leading sectors.
Sectors we cover in include mining, energy, renewable energy, water stocks, food and beverage (including organic and LOHAS, wine), defense and security, biotech, technology and mobile. We have also recently expanded our global coverage to include Latin American stocks, sports and entertainment.

Follow Investorideas.com on Twitter http://twitter.com/#!/Investorideas
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Sign up for free news alerts at Investorideas.com

Become an Investorideas.com Member and access our online stock directories listing thousands of publicly traded stocks in leading sectors 

Spade Defense Index Disclaimer:  The information presented here is for information purposes only and should not represent a solicitation or an offer to purchase an investment product.

Disclaimer/ Disclosure: The Investorideas.com newswire is a third party publisher of news and research as well as creates original content as a news source. Original content created by investorideas is protected by copyright laws other than syndication rights. Investorideas is a news source on Google news  and syndication partners. Our site does not make recommendations for purchases or sale of stocks or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated by featured companies, news submissions, content marketing and online advertising. Contact each company directly for press release questions. Disclosure is posted on each release if required but otherwise the news was not compensated for and is published for the sole interest of our readers. More disclaimer info: http://www.investorideas.com/About/Disclaimer.asp

BC Residents and Investor Disclaimer: Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: http://www.bcsc.bc.ca/release.aspx?id=6894. Global investors must adhere to regulations of each country.

Contact Investorideas.com
800 665 0411




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